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Depreciation Rates as per Income Tax Act | Depreciation Rate Chart

Depreciation Rates: The complete guide about Depreciation is as follows. Depreciation Rate Chart for AY 2016-17 helps you know the Income tax depreciation rates for various assessee types. Read the complete article and know what is Depreciation? Depreciation rates, etc. Here you can also get Depreciation rates as per Income Tax Act for most commonly used assets.

What is Depreciation?

Depreciation as per Income Tax Act, 1962 is an allowable deduction from Business or Profession Income. In short, it has become mandatory to calculate depreciation. The decrease in value of an asset/property over a period is referred to as Depreciation. If any taxpayer has acquired and used an asset in their profession or business, he can claim depreciation during the computation of Profits and Gains of Business/Profession. For depreciation calculation or to know how to calculate depreciation, Depreciation rates are needed. The depreciation rates as per Income Tax Act for AY 2016-17, 2017-18 are as follows.

Depreciation Calculation

Depreciation calculation is done by two methods. One is as per the Companies Act i.e. for companies, the depreciation is calculated as per the provisions of Companies Act. Another method is as per Income Tax Act i.e. depreciation is calculated as per the provisions Income Tax Act. Here we have provided the Depreciation rate chart as per Income Tax Act, 1961 for AY 2016-17 which is easy for us to calculate.

Depreciation Rates AY 2003-04 onwards

Below rates of depreciation are applicable from AY 2003-04 onwards. That is, for Depreciation Rates for AY 2016-17 & Depreciation rates for AY 2017-18 also you can refer below tables. General Rate of Depreciation as per Income Tax. Check Income Tax Depreciation rates and Depreciation Rate Chart As Per Income Tax Act. Here you can also Download Depreciation Rate Chart as per Income Tax Act. Get Latest New Depreciation Rates issued by Income Tax Department. Depreciation rate chart as per income tax for 2016-17.

Income Tax Depreciation Rates

S. No.

Asset Class

Asset Type

Depreciation Rates

1.

Building

Residential buildings excluding boarding houses and hotels.

5%

Boarding houses and hotels.

10%

Purely temporary constructions like wooden structures.

100%

2.

Furniture

Any fittings/furniture including electrical fittings.

10%

3.

Plant and machinery

Taxis/Lorries/motor buses used in a business of running them on hire.

30%

Motorcars excluding those used in a business of running them on hire.

15%

Computers and computer software.

60%

Books owned by assessee carrying on a profession being annual publications.

100%

Books belonging to assessee carrying on business in running lending libraries.

100%

Books belonging to assessee carrying on profession not being annual publications.

60%

4.

Intangible assets

Franchise, patents, trademark, copyright, license, know-how or other commercial or business rights of similar nature.

25%

Depreciation Rates as per Income Tax Act, 1961

Depreciation Rates as per Income Tax Act, 1962 in depth are given below. The assets are two types

Tangible Assets: It covers the Asset class of Building, Furniture and Plant and machinery.

Income Tax Depreciation Rate Chart for Tangible Assets

Buildings apart from those used mainly for residential purposes and not covered by sub-items 1 (above) and 3 (below).

100%

3.

Buildings procured on or after 1st September 2002, for installing machinery and plant forming part of water supply project or water treatment system and which is used for the business purpose of providing infrastructure facilities under clause (i) of subsection (4) of section 80-IA.

Motorcars, except those used in a business of running them on hire, procured or put to use on or after April 1, 1990.

15%

3(i)

Aeroplanes – Aero Engines.

40%

3(ii)

Motor buses, motor lorries and Motor taxis used in a business of running them on hire.

30%

3(iii)

Commercial vehicle procured by the taxpayer on or after 1st October 1998, but before 1st April 1999, and is used for any period prior to 1st April 1999, for the profession purpose or business purpose in agreement with the third proviso to clause (ii) of sub-section (1) of section 32.

40%

3(iv)

New commercial vehicle which is procured on or after 1st October 1998, but before 1st April 1999, in replacement of condemned vehicle of more than 15 years of age and is used for any period prior to 1st April 1999, for the profession purpose or business purpose in agreement with the third proviso to clause (ii) of sub-section (1) of section 32.

60%

3(v)

New commercial vehicle which is procured on or after 1st April 1999, but before 1st April 2000, in replacement of condemned vehicle of more than 15 years of age and is put to use before 1st April 2000, for the profession purpose or business purpose in agreement with the 2nd proviso to clause (ii) of sub-section (1) of section 32.

60%

3(vi)

New commercial vehicle procured on or after 1st April 2001, but before 1st April 2002, and is put to use before 1st April 2002, for the profession or business purpose.

Plant and machinery, used in processing, weaving and garment sector of textile industry, which is bought under TUFS on or after April 1, 2001, but before April 1, 2004, and is put to use before April 1, 2004.

50%

7.

Plant & machinery installed and procured on or after 1st September 2002, in a water treatment system or a water supply project and put to use for the business purpose of providing infrastructure facility under clause (i) of sub-section (4) of section 80-IA.

100%

8.

1. Wooden parts used in artificial silk manufacturing machinery.

100%

2. Match factories: wooden match frames.

3. Cinematograph films: bulbs of studio lights.

100%

4. Salt works – reservoirs, condensers, salt pans, etc., made of sandy, clayey, or earthy material or any other similar material.

Comments

Hi Could you please confirm the depreciation rates on solar assets for FY16-17 and FY17-18 onwards. As per the finance bill 2016, it was reduced to 40% from FY17-18 onvwards but your listing shows it as 60% while income tax website shows the rate of 80%.

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